Rumors are emerging out of China that Ericsson is looking to make an acquisition, and the most likely candidates include UT Starcom or Harbor Networks. Shanghai Daily cites China Business News (CBN) as the source of this speculation. Apparently, Ericsson’s President and chief executive officer, Carl-Henric Svanberg, revealed last Friday in South China’s Guangzhou city that his company is engaged in talks concerning an acquisition in China. Harbor is a rival of Huawei, and has been feeling the competitive pressures of the market. UTStarcom, once a gravity defying network equipment maker has hit the skids, and I wonder if buying either of the two is a smart strategy for Ericsson.
If the goal is China market penetration with good (and compatible with Ericsson) IP DSLAM technology, then Harbor is the better choice; if the goal is more synergy in markets outside of China and PHS to go along with GSM technology, then UTStarcom would be the better choice.
I think it would be more interesting to see Ericsson go with Harbor because that may be the more upsetting combination to ZTE, Huawei and ASB in the China market and could shake up the rest of the EU and US suppliers once the Harbor-based designs start shipping through the Ericcson channels in the rest of the world.
They do have a killer IP DSLAM in the Hammer line.